Hospital Readmissions for U.S. Medicare Patients Decline

Feb. 28 (Bloomberg) -- Hospital readmission rates for
Medicare patients are dropping after increasing for more than
five years as the 2010 U.S. health-care law begins levying
penalties for excessive numbers of repeat patient visits.

Thirty-day readmission rates fell to 17.8 percent late last
year after averaging 19 percent for the past five, the Centers
for Medicare and Medicaid Services said today on its website.
The decline translates to 70,000 fewer readmissions in 2012 for
Medicare, the U.S. health plan for the elderly and disabled.

The drop shows the Affordable Care Act is working to rein
in costs, Jonathan Blum, a deputy administrator for the Centers
for Medicare and Medicaid Services, said today at a U.S. Senate
Finance Committee hearing in Washington. He also reiterated that
health-care spending is growing more slowly.

“Quality is improving and costs are growing more slowly,”
Blum said.

The U.S. is levying fines against hospitals with high rates
of patient readmissions under a provision of the health-care
system overhaul targeting $8 billion in Medicare cost savings
within six years. Almost 1 in 5 Medicare patients hospitalized
in the U.S. is readmitted within a month of their release,
adding to hospital costs that jumped to $17.5 billion in 2010,
according to the Medicare agency.

Saving Money

The effort to lower readmissions is leading to better
health outcomes and saving money, said Senator Robert Casey, a
Pennsylvania Democrat.

“This is very difficult to tackle, this issue that relates
to delivering better care at a lower cost,” Casey said. “It
looks like you are beginning to unlock that door.”

Under the health-care law, hospitals with a high number of
readmissions within 30 days can lose as much as 1 percent of
their Medicare payout for fiscal 2013 and 3 percent in 2015. The
program, which started with discharges beginning Oct. 1, focuses
on Medicare patients suffering from heart failure, heart attack
and pneumonia.

The penalties may cost the industry $280 million this year,
according to an August report by Medicare. Average fines for a
hospital are about $125,000, according to a September report
from the Medicare Payment Advisory Commission.

In addition to a drop in readmission rates, clinicians at
some hospitals have reduced their early elective deliveries of
newborns to close to zero, according to the fact sheet. Among
135 hospitals reporting common measures, early elective delivery
rates have fallen by 48 percent.

Blum also said costs are being contained by a payment and
care model called Accountable Care Organizations that seek to
coordinate medical services and reduce waste in exchange for a
share of the savings produced. There are more than 250 groups
participating in Medicare Accountable Care Organizations,
serving about 4 million beneficiaries, he said.

ACOs are expected to save as much as $940 million in the
first for years, according to Blum’s agency.